NEW YORK--(BUSINESS WIRE)--On the effective date of June 30, 2014, Fitch Ratings will upgrade the
long-term rating assigned to the $100,000,000 City of New York general
obligation bonds, fiscal 2012 series A, subseries A-4 (adjustable rate
bonds) to 'AAA' from 'AA' and confirm the 'F1' short-term rating. The
Rating Outlook is Stable for the long-term rating. The rating action is
in connection with the substitution of the irrevocable standby letter of
credit (LOC) currently provided by KBC Bank (rated 'A-/F1', Stable
Outlook) with a substitute LOC to be issued by Bank of Tokyo-Mitsubishi
UFJ, Ltd. (BTMU, rated 'A/F1', Stable Outlook).

KEY RATING DRIVERS:

The long-term rating will be determined using Fitch's dual-party pay
criteria and will be based jointly on the underlying rating assigned to
those bonds by Fitch (currently rated 'AA', Stable Outlook), and the
rating assigned by Fitch to BTMU, which will provide the substitute LOC
as support for the bonds. The short-term 'F1' rating will be based
solely on the substitute LOC.

For information about the underlying credit rating see the new issue
report dated June 11, 2014 for the New York City , New York $850MM
General Obligation Bonds, 2014 available at 'www.fitchratings.com'.

Fitch's dual-party pay criteria consider the likelihood of the failure
of both a rated obligor and a bank LOC provider. The methodology results
in a long-term rating that is up to two notches higher than the stronger
of the two credits if the following conditions are met: (1) both
entities have a rating of 'A' or higher; (2) the transaction is
structured such that payments from both the municipal issuer and the
bank are in the flow of funds and both entities would have to fail to
perform before the bonds defaulted; and (3) the credit of the bank and
the rated obligor have no more than a medium degree of correlation.
Fitch has determined a low degree of correlation between BTMU and the
obligor which results in a rating of 'AAA' for the bonds. If either the
underlying bond rating or the bank rating were downgraded to 'A-' or
lower, the dual-party pay criteria could no longer be applied, and the
long-term rating assigned to the bonds would then be adjusted to the
higher of the bank rating and the underlying bond rating.

Pursuant to the substitute LOC, the bank is obligated to make payments
of purchase price for tendered bonds, including bonds that are required
to be tendered upon any failure of the city to provide funds to Bank of
New York Mellon, as fiscal agent, for the payment of principal and
interest on the bonds on a payment date. The ratings will expire upon
the earliest of: (a) June 29, 2017, the initial stated expiration date
of the substitute LOC, unless such date is extended; (b) conversion to a
mode other than weekly rate; (c) any prior termination of the LOC; and
(d) defeasance of the bonds. The substitute LOC provides full and
sufficient coverage of principal plus an amount equal to 35 days of
interest at a maximum rate of 9% based on a year of 365 days and
purchase price for tendered bonds, while in the weekly rate mode.
Barclays Capital is the remarketing agent for the bonds.

RATING SENSITIVITIES:

As described above, the long-term rating is tied to the long-term rating
assigned to the bond obligor and the long-term rating that Fitch
maintains on the bank providing the substitute LOC. Changes to one or
both of these ratings may affect the long-term rating assigned to the
bonds.

The short-term rating is exclusively tied to the short-term rating that
Fitch maintains on the bank providing the substitute LOC and will
reflect all changes to that rating.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND
DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS
OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES
AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF
THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE
RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR
RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY
CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
WEBSITE.